Jefferies Group LLC today announced financial results for its fiscal fourth quarter 2016.

Highlights for the three months ended November 30, 2016:

  • Total Net Revenues of $742 million
  • Investment Banking Net Revenues of $415 million
  • Total Equities and Fixed Income Net Revenues of $325 million
  • Earnings Before Income Taxes of $97 million
  • Net Earnings of $87 million

Rich Handler, Chairman and Chief Executive Officer, and Brian Friedman, Chairman of the Executive Committee, commented: "We are pleased with our fourth quarter results, which reflect a strong performance in investment banking, a solid performance from our core equities business, and a continuing significant improvement in our fixed income results. Our investment banking results benefited from a record quarter of advisory fees, as well as increasingly active new issue capital markets. Our strong finish to the year, combined with the continued positive momentum in all of our businesses, positions us well for 2017. We thank our clients, our employees, our shareholders, our bondholders and all our business partners for their continued support."

The attached financial tables should be read in conjunction with our Quarterly Report on Form 10-Q for the quarter ended August 31, 2016 and our Annual Report on Form 10-K for the year ended November 30, 2015. Amounts herein pertaining to November 30, 2016 represent a preliminary estimate as of the date of this earnings release and may be revised in our Annual Report on Form 10-K for the year ended November 30, 2016.

This release contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements about our future results and performance, including our future market share and expected financial results. It is possible that the actual results may differ materially from the anticipated results indicated in these forward-looking statements. Please refer to our most recent Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from those projected in these forward-looking statements.

Jefferies, the world's only independent full-service global investment banking firm focused on serving clients for over 50 years, is a leader in providing insight, expertise and execution to investors, companies and governments. Our firm provides a full range of investment banking, sales, trading, research and strategy across the spectrum of equities, fixed income and foreign exchange, as well as wealth management, in the Americas, Europe and Asia. Jefferies Group LLC is a wholly-owned subsidiary of Leucadia National Corporation (NYSE:LUK), a diversified holding company.

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  JEFFERIES GROUP LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in Thousands) (Unaudited)       Quarter Ended November 30, 2016 August 31, 2016 November 30, 2015   Revenues: Commissions and other fees $ 157,549 $ 152,044 $ 146,288 Principal transactions 137,362 167,483 (38,534 ) Investment banking 415,067 294,930 372,930 Asset management fees and investmentincome from managed funds 1,319 15,877 8,020 Interest income 202,002 213,716 221,962 Other revenues 26,661   19,791   (8,736 ) Total revenues 939,960 863,841 701,930 Interest expense 198,191   209,391   188,843   Net revenues 741,769   654,450   513,087     Non-interest expenses: Compensation and benefits 427,451 376,438 284,647   Non-compensation expenses: Floor brokerage and clearing fees 42,946 40,189 40,680 Technology and communications 66,396 64,512 78,918 Occupancy and equipment rental 26,635 24,987 26,567 Business development 25,405 20,259 27,098 Professional services 29,763 29,761 27,613 Other 26,644   17,582   18,026   Total non-compensation expenses 217,789   197,290   218,902   Total non-interest expenses 645,240   573,728   503,549   Earnings before income taxes 96,529 80,722 9,538 Income tax expense (benefit) 9,454   39,564   (10,572 ) Net earnings 87,075 41,158 20,110 Net earnings (loss) attributable to noncontrolling interests (105 ) (11 ) 148   Net earnings attributable to Jefferies Group LLC $ 87,180   $ 41,169   $ 19,962     Pretax operating margin 13.0 % 12.3 % 1.9 % Effective tax rate (1) 9.8 % 49.0 % (110.8 )%   (1) The effective tax rate for the three months ended November 30, 2016 is impacted by revisions to previously forecasted results.     JEFFERIES GROUP LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in Thousands) (Unaudited)     Year Ended November 30, 2016 2015   Revenues: Commissions and other fees $ 611,574 $ 659,002 Principal transactions 519,652 172,608 Investment banking 1,193,973 1,439,007 Asset management fees and investmentincome from managed funds 31,062 8,015 Interest income 857,838 922,189 Other revenues 19,724   74,074   Total revenues 3,233,823 3,274,895 Interest expense 819,209   799,654   Net revenues 2,414,614   2,475,241     Non-interest expenses: Compensation and benefits 1,568,948 1,467,131   Non-compensation expenses: Floor brokerage and clearing fees 167,205 199,780 Technology and communications 262,396 313,044 Occupancy and equipment rental 101,133 101,138 Business development 93,105 105,963 Professional services 112,562 103,972 Other 79,293   69,986   Total non-compensation expenses 815,694   893,883   Total non-interest expenses 2,384,642   2,361,014   Earnings before income taxes 29,972 114,227 Income tax expense 14,566   18,898   Net earnings 15,406 95,329 Net earnings (loss) attributable to noncontrolling interests (28 ) 1,795   Net earnings attributable to Jefferies Group LLC $ 15,434   $ 93,534     Pretax operating margin 1.2 % 4.6 % Effective tax rate 48.6 % 16.5 %     JEFFERIES GROUP LLC AND SUBSIDIARIES SELECTED STATISTICAL INFORMATION (Amounts in Thousands, Except Other Data) (Unaudited)             Quarter Ended November 30, 2016 August 31, 2016 November 30, 2015

Revenues by Source

Equities $ 175,960 $ 148,308 $ 122,693 Fixed income (1) 149,423 195,335 9,444 Total Equities and Fixed Income 325,383 343,643 132,137   Equity 62,085 68,218 93,547 Debt 128,706 72,473 68,705 Capital markets 190,791 140,691 162,252 Advisory 224,276 154,239 210,678 Total investment banking 415,067 294,930 372,930   Asset management fees and investment income from managed funds: Asset management fees 633 7,610 5,864 Investment income from managed funds 686 8,267 2,156

Total

1,319 15,877 8,020 Net revenues $ 741,769 $ 654,450 $ 513,087  

Other Data

Number of trading days 63 65 63 Number of trading loss days 11 8 22 Number of trading loss days excluding KCG 4 4 23   Average firmwide VaR (in millions) (2) $ 8.46 $ 6.62 $ 9.72 Average firmwide VaR excluding KCG (in millions) (2) $ 5.93 $ 4.48 $ 8.46   (1) The results for the quarter ended November 30, 2015 include $0.4 million of negative revenues globally from the Bache business. During the second quarter of 2016, we completed the exit of the Bache business. (2) VaR estimates the potential loss in value of our trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in our Annual Report on Form 10-K for the year ended November 30, 2015.     JEFFERIES GROUP LLC AND SUBSIDIARIES SELECTED STATISTICAL INFORMATION (Amounts in Thousands, Except Other Data) (Unaudited)         Twelve Months Ended November 30, 2016 November 30, 2015

Revenues by Source

Equities $ 549,553 $ 757,447 Fixed income (1) 640,026 270,772 Total Equities and Fixed income 1,189,579 1,028,219   Equity 235,207 408,474 Debt 304,576 398,179 Capital markets 539,783 806,653 Advisory 654,190 632,354 Total investment banking 1,193,973 1,439,007   Asset management fees and investment income (losses) from managed funds: Asset management fees 26,412 31,819 Investment income (losses) from managed funds 4,650 (23,804) Total 31,062 8,015 Net revenues $ 2,414,614 $ 2,475,241  

Other Data

Number of trading days 253 252 Number of trading loss days 38 64 Number of trading loss days excluding KCG 21 55   Average firmwide VaR (in millions) (2) $ 7.91 $ 12.39 Average firmwide VaR excluding KCG (in millions) (2) $ 5.77 $ 9.97   (1) The results for the nine months ended November 30, 2015 include $80.2 million of net revenues globally from the Bache business. During the second quarter of 2016, we completed the exit of the Bache business. (2) VaR estimates the potential loss in value of our trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in our Annual Report on Form 10-K for the year ended November 30, 2015.     JEFFERIES GROUP LLC AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (Amounts in Millions, Except Where Noted) (Unaudited)             Quarter Ended November 30, 2016 August 31, 2016 November 30, 2015  

Financial position:

Total assets (1) $ 36,941 $ 38,128 $ 38,564 Average total assets for the period (1) $ 43,412 $ 42,270 $ 48,722 Average total assets less goodwill and intangible assets for the period (1) $ 41,560 $ 40,408 $ 46,835   Cash and cash equivalents (1) $ 3,529 $ 3,159 $ 3,510 Cash and cash equivalents and other sources of liquidity (1) (2) $ 5,303 $ 4,873 $ 4,940 Cash and cash equivalents and other sources of liquidity - % total assets (1) (2) 14.4% 12.8% 12.8% Cash and cash equivalents and other sources of liquidity - % total assets less goodwill and intangible assets (1) (2) 15.1% 13.4% 13.5%   Financial instruments owned (1) $ 13,810 $ 14,328 $ 16,559 Goodwill and intangible assets (1) $ 1,847 $ 1,856 $ 1,882   Total equity (including noncontrolling interests) $ 5,371 $ 5,327 $ 5,509 Total member's equity $ 5,370 $ 5,321 $ 5,482 Tangible member's equity (3) $ 3,523 $ 3,465 $ 3,600    

Level 3 financial instruments:

Level 3 financial instruments owned (1) (4) $ 413 $ 434 $ 542 Level 3 financial instruments owned - % total assets (1) 1.1% 1.1% 1.4% Level 3 financial instruments owned - % total financial instruments (1) 3.0% 3.0% 3.3% Level 3 financial instruments owned - % tangible member's equity (1) 11.7% 12.5% 15.1%  

Other data and financial ratios:

Total long-term capital (1) (5) $ 10,501 $ 10,803 $ 10,797 Leverage ratio (1) (6) 6.9 7.2 7.0 Adjusted leverage ratio (1) (7) 8.6 8.7 8.7 Tangible gross leverage ratio (1) (8) 10.0 10.5 10.2   Number of trading days 63 65 63 Number of trading loss days 11 8 22 Number of trading loss days excluding KCG 4 4 23 Average firmwide VaR (9) $ 8.46 $ 6.62 $ 9.72 Average firmwide VaR excluding KCG (9) $ 5.93 $ 4.48 $ 8.46   Number of employees, at period end 3,329 3,323 3,557     JEFFERIES GROUP LLC AND SUBSIDIARIES FINANCIAL HIGHLIGHTS - FOOTNOTES     (1) Amounts pertaining to November 30, 2016 represent a preliminary estimate as of the date of this earnings release and may be revised in our Annual Report on Form 10-K for the year ended November 30, 2016.   (2) At November 30, 2016, other sources of liquidity include high quality sovereign government securities and reverse repurchase agreements collateralized by U.S. government securities and other high quality sovereign government securities of $1,455 million, in aggregate, and $319 million, being the total of the estimated amount of additional secured financing that could be reasonably expected to be obtained from our financial instruments that are currently not pledged at reasonable financing haircuts. The corresponding amounts included in other sources of liquidity at August 31, 2016 were $1,384 million and $330 million, respectively, and at November 30, 2015, were $1,266 million and $164 million, respectively. The amounts included in other sources of liquidity at August 31, 2016 and November 30, 2015 have been reduced by $147 million and $141 million, respectively, from what was previously disclosed, to reflect adjustments for certain securities that have subsequently been identified to have been encumbered at such dates.   (3) Tangible member's equity (a non-GAAP financial measure) represents total member's equity less goodwill and identifiable intangible assets. We believe that tangible member's equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible member's equity, making these ratios meaningful for investors.   (4) Level 3 financial instruments represent those financial instruments classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned.   (5) At November 30, 2016, August 31, 2016 and November 30, 2015, total long-term capital includes our long-term debt of $5,131 million, $5,476 million and $5,288 million, respectively, and total equity. Long-term debt included in total long-term capital is reduced by the amount of debt maturing in less than one year, where applicable.   (6) Leverage ratio equals total assets divided by total equity.   (7) Adjusted leverage ratio (a non-GAAP financial measure) equals adjusted assets divided by tangible total equity, being total equity less goodwill and identifiable intangible assets. Adjusted assets (a non-GAAP financial measure) equals total assets less securities borrowed, securities purchased under agreements to resell, cash and securities segregated, goodwill and identifiable intangibles plus financial instruments sold, not yet purchased (net of derivative liabilities). At November 30, 2016, August 31, 2016 and November 30, 2015, adjusted assets were $30,352 million, $30,318 million and $31,675 million, respectively. We believe that adjusted assets is a meaningful measure as it excludes certain assets that are considered of lower risk as they are generally self-financed by customer liabilities through our securities lending activities.   (8) Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and identifiable intangible assets divided by tangible member's equity. The tangible gross leverage ratio is used by rating agencies in assessing our leverage ratio.   (9) VaR estimates the potential loss in value of our trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in our Annual Report on Form 10-K for the year ended November 30, 2015.  

For further information:Jefferies Group LLCPeregrine C. Broadbent, 212-284-2338Chief Financial Officer

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